New Subcommittee: Per the meeting of the Advocacy Committee in New Orleans on June 10, 2021, there is a new Cybersecurity Subcommittee, whose chair is Mike Barnes, Director of Information Technology at OrthoTennessee. Future editions of the newsletter will have a separate section on relevant cybersecurity issues. This new subcommittee will focus on the goal of the Advocacy Committee that Congress enact legislation to protect physician group practices (PGPs) from legal liability for data breaches due to cyber attacks when the PGPs have followed the standard protocols recommended to prevent such breaches. It appears that there are no bills currently in Congress on this issue.

Other Changes: At the New Orleans meeting, the Advocacy Committee evaluated the OrthoForum’s advocacy priorities and the potential for achieving our goals in the current political climate. Accordingly, we will no longer have a Stark Law Subcommittee, a Physician-Owned Hospital Subcommittee, or a Balance Billing Subcommittee. The Advocacy Committee will, of course, continue to monitor these issues, will engage with the federal government on the issues as appropriate, and will notify OrthoForum members of any significant developments concerning the issues (e.g., see the discussion in the newsletter on a recent balance-billing final rule).

GENERALLY: On July 13, 2021, the Centers for Medicare & Medicaid Services (CMS) submitted this proposed rule for publication and it was scheduled to be published in the Federal Register on July 23. Comments are due on September 13. The Advocacy Committee is in the process of studying the proposed rule. (The version submitted for publication has 1,747 pages.)

To view the proposed rule, please click HERE. To view the CMS fact sheet on it, please click HERE.

CONVERSION FACTOR: The conversion factor would be reduced from the current 34.8931 (which reflects action taken by Congress in December 2020) to 33.5848, a reduction of 1.3083 (3.75%). This would result in a 1% increase for orthopedic surgery (due to an increase in PE RVUs), but a 2 percent reduction for physical therapy and occupational therapy (due to 1% decreases for both work and PE RVUs).

TELEHEALTH: The proposed rule would continue through the end of 2023 many of the Medicare telehealth flexibilities allowed during the Covid-19 public health emergency (PHE), even if the PHE ends well before then. The preamble to the proposed rule states that this extension of the flexibilities “will allow additional time for stakeholders to collect, analyze and submit data on those services to support their consideration for permanent addition [to the Medicare telehealth program].” (See the Therapy Services update for more information on telehealth issues for physical therapists and occupational therapists.)

EVALUATION AND MANAGEMENT (E/M) VISITS: CMS proposes to update coding and payment for E/M visits and also to make changes on how shared E/M visits are handled, such as having the clinician that provides the substantive portion of the evaluation and management bill for the visit. It also proposes adjusting the definition of split/shared E/M visits to include services provided by non-physician providers in the same group.

POTENTIALLY MISVALUED CODES: CMS proposed to evaluate CPT code 22551 (fusion of spine bones with removal of disc at upper spinal column, anterior approach, complex) and “common related services”. CMS notes in the preamble that a stakeholder nominated the code because the stakeholder believes that certain types of surgeries under the code should have an increased number of work RVUs. CMS indicates that it is not inclined to change the current number of work RVUs for the code, but it would like to receive comments from the public before making a decision.

OTHER PROVISIONS: CMS is soliciting stakeholder feedback on health equity data collection and on current Medicare payments for administering vaccines.

BACKGROUND:  The No Surprises Act was enacted in December 2020 and will take effect on January 1, 2022. As noted in previous newsletters, patients will generally pay the same for out-of-network emergency care as they do for in-network emergency care (i.e., balance billing will be banned) if their health plans cover in-network emergency care. The amount paid to an out-of-network emergency provider can be the subject of an “independent dispute resolution” (IDR) process, although the IDR process will not be available in some States (see below). The Act applies both to emergency departments that are physically part of a hospital and emergency departments that are not (i.e., are “independent freestanding” emergency departments). In addition, the Act applies to non-emergency care a patient receives at an in-network facility that, unknown to the patient, includes care from a person who is a nonparticipating provider.
On July 1, the Department of Health and Human Services (HHS), the Labor Department, and the Treasury Department unofficially released the first regulations to implement the No Surprises Act, which were submitted for publication on July 6 and were formally published in the Federal Register on July 13. Each of the three Departments has its own No Surprises regulations, according to the jurisdiction of the Department. Therefore, there actually are three final rules in a single Federal Register document.

These recent regulations were issued as “interim” final rules, meaning they were issued without first having a period for the submission of comments from the public (i.e., there was no proposed rule). The Departments will, however, accept comments on these final rules through September 7.

The final rules did not address the IDR process. That process will be addressed in later final rules. The preamble to the current final rules states that they

“require emergency services to be covered without any prior authorization, without regard to whether the health care provider furnishing the emergency services is a participating provider or a participating emergency facility with respect to the services, and without regard to any other term or condition of the plan or coverage other than the exclusion or coordination of benefits or a permitted affiliation or waiting period.”

NOTICE TO PATIENTS REGARDING NONPARTICIPATING PROVIDERS; CONSENT: A patient can consent to receiving care from nonparticipating providers, but the consent is not effective unless certain requirements are met. The notice-and-consent form created by HHS must be used. If certain requirements are met, it is permissible for multiple nonparticipating providers that are furnishing related items and services to an individual to provide a single notice to the individual. There are timing requirements for each notice. The preamble to the final rules includes the following:

“[I]f an individual schedules an appointment for such items or services at least 72 hours before the date of the appointment, the provider or facility must provide the notice to the individual . . . no later than 72 hours before the date of the appointment; and if an individual schedules an appointment for such items or services within 72 hours of the date of the appointment, the provider or facility must provide the notice to the individual . . . on the day that the appointment is made. . . . [I]n the situation where an individual is provided the notice on the same day that the items or services are furnished, providers and facilities are required to provide the notice no later than 3 hours prior to furnishing items or services . . .”

QPA GENERALLY: The final rules provide details on the methodology that health plans will use to determine the “qualifying payment amount”, which (for the item or service involved) is the median in-network contracted rate in the geographic area involved for the applicable insurance market (large group market, small group market, or individual market) as adjusted for inflation occurring after January 31, 2019.

The qualifying payment amount (QPA) is one of the factors considered in the IDR process. It is also part of the methodology for determining the amount of the patient’s cost-sharing payment. The QPA is used for IDR purposes and patient cost-sharing purposes unless there is a State law that governs the amount of payments to out-of-network providers, or unless the State is participating in the CMMI All-Payer Model. If there is such a State law, or if the State is participating in that Model, the IDR process is not available in that State.

QPA TRANSPARENCY: The preamble states that the Departments recognize that providers and emergency facilities subject to the Act need transparency regarding how the QPA was determined, and that this information is also important in informing the negotiation process. “The Departments seek to ensure transparent and meaningful disclosure about the calculation of the QPA while minimizing administrative burdens on plans and issuers. These interim final rules therefore require that plans and issuers make certain disclosures with each initial payment or notice of denial of payment, and that plans and issuers must provide additional information upon request of the provider or facility. This information must be provided in writing, either on paper or electronically, to [a nonparticipating provider or emergency facility when the Act applies, rather than State law or the CMMI All-Payer Model].”

QPA THIRD-PARTY DATABASE: The preamble includes the following statements about QPA-related third-party databases: “The No Surprises Act specifies an alternative methodology for determining the QPA in cases where a plan or issuer has insufficient information to calculate a median contracted rate for an item or service. The statute, however, envisions that these alternative methodologies, such as use of a third-party database, will be used in only limited circumstances where the plan or issuer cannot rely on its contracted rates as a reflection of the market dynamics in a geographic region. Consistent with this statutory goal, these interim final rules generally seek to ensure that plans and issuers can meet the sufficient-information standard when determining the QPA and that use of alternative methodologies is minimized wherever possible.”

POST-STABILIZATION SERVICES; URGENT CARE: Services provided during an inpatient or outpatient stay after the patient receives emergency services and is stabilized will be considered to be emergency services (and therefore subject to the balance billing ban) unless the patient provides consent for balance billing in accordance with the final rules or certain other exceptions apply. In addition, outpatient “urgent care” centers will generally be treated as independent freestanding emergency departments if State law authorizes such centers to provide emergency care.

“CLEAN” CLAIMS: The No Surprises Act requires require health plans to send “an initial payment or notice of denial of payment” not later than 30 calendar days after a nonparticipating provider submits a bill for items and services that are subject to the Act. The final rules interpret this requirement to mean that the 30-day period will not begin unless the bill provides sufficient information for the health plan to determine that it has an obligation to pay the claim (commonly known as a “clean” claim). Specifically, the claim must provide sufficient information for the health plan to determine that the claim is subject to the Act.

APMs: The preamble addresses alternative payment models (APMs) that do not use a fee-for-service approach, stating that “in the case of these alternative payment models, such as bundled and fully or partially capitated arrangements, where payment made by a plan or issuer is not fully on a fee-for-service basis, these interim final rules provide that the plan or issuer must calculate a median contracted rate for each item or service using the underlying fee schedule rates for the relevant items and services, if underlying fee schedule rates are available.”

Proposed PFS Reimbursement Cuts

As noted in the section of the newsletter concerning general policy issues, the Centers for Medicare & Medicaid Services (CMS) released the proposed rule for the Physician Fee Schedule (PFS) on July 13, 2021, and it was scheduled to be published in the Federal Register on July 23. The conversion factor would be reduced from the current 34.8931 (which reflects action taken by Congress in December 2020) to 33.5848, a reduction of 1.3083. This would result in a 2 percent reduction for physical therapy and occupational therapy, due to 1% decreases for both work and PE RVUs. The Advocacy Committee continues to be concerned about cuts to Medicare reimbursement for physical therapists (PTs) and occupational therapists (OTs) and their assistants. The 2021 and 2022 cuts, as well as the sequestration cut scheduled for 2022, will have negative effects on therapy services. The Committee will engage with Congress on this issue. In addition, the Advocacy Committee works with AAOS on the issue of Medicare reimbursement cuts.

Proposed PFS Telehealth Provisions

Overall, the proposed rule is favorable on telehealth issues. It would continue through the end of 2023 many of the Medicare telehealth flexibilities allowed during the Covid-19 public health emergency (PHE), even if the PHE ends well before then. CMS proposes to allow PTs to continue providing telehealth services for CPT codes 97161-97164 and to allow OTs to continue doing so for codes 97165-97168. This extension would also apply to therapy codes 97110, 97112, and 97116. Therapy codes 97150, 97530, and 97542, however, will become ineligible for telehealth as of the end of the public health emergency. Moreover, CMS notes in the preamble to the proposed rule that PTs and OTs are not among the practitioners who, under the Medicare statute, are eligible to provide telehealth services; therefore, they would once again be ineligible as of 2024, when the extension provided by the proposed rule expires.

Telehealth Legislation

Both the Advocacy Committee and AAOS support the Telehealth Modernization Act (S. 368; H.R. 1332). This bipartisan legislation would authorize (but not require) CMS to expand the list of telehealth providers to include any health care professional who is eligible to bill Medicare. This presumably would include PTs and OTs once a physician has certified the plan of care, but it would not include their assistants. The bill would eliminate telehealth geographic limitations, as well as restrictions on the types of sites at which the patient may receive telehealth services, including allowing the patient’s home to be a site of service. In the Senate, the bill has 13 cosponsors (6 Democrats, 6 Republicans, and 1 Independent). In the House, it has 65 cosponsors (29 Democrats and 36 Republicans). The bill appears to have momentum, as the House bill picked up 22 new cosponsors during June.

Also of interest is a discussion draft of the “CURES 2.0” legislation that was released on June 22 and is expected to be introduced in the House by Representatives Diana DeGette (D-CO) and Fred Upton (R-MI). (This draft is known as “CURES 2.0” because a related bill they introduced was enacted in 2016, the 21st Century Cures Act.) Although this discussion draft primarily concerns the Food and Drug Administration, it includes a section on telehealth. It would eliminate the current statutory definition of “practitioner” and allow CMS to expand the list of telehealth providers to any health professional eligible to bill Medicare (similar to the Telehealth Modernization Act discussed above). This means PTs and OTs could be included. This discussion draft is important, as CURES 2.0 will likely be an influential, bipartisan bill. In addition, a bill very similar to this telehealth section of the CURES 2.0 draft has been separately introduced as H.R. 4040 by Representatives Liz Cheney (R-WY) and Debbie Dingell (D-MI).

Compared to the bills noted above, the CONNECT for Health Act of 2021 is not favorable for PTs and OTs because it would not change the statutory definition in current law of “practitioner”; therefore, PTs and OTs could not become telehealth providers under the bill. The Senate bill (S. 1512) has 59 cosponsors (27 Democrats, 30 Republicans, and 2 independents). The House bill (H.R. 2903) has 65 cosponsors (46 Democrats and 19 Republicans).

Background on ASC Payments: The payment for a procedure on the ASC Covered Procedures List (CPL) is the relative weight for the procedure multiplied by the conversion factor, with adjustments for variations among geographic areas in labor costs (known as the geographic wage index). Each year CMS “scales” the relative weights and adjusts the conversion factor to achieve budget neutrality. The adjustment to the conversion factor includes a budget-neutrality adjustment to the geographic wage index.

Each year the conversion factor is updated. CMS has decided that, for 2019 through 2023, the agency will update the conversion factor based on the productivity-adjusted hospital market basket, which is more favorable than the former update methodology based on the consumer price index for all urban consumers. It is not known at this point what update methodology CMS will use for 2024. The proposed rule states that, during the period 2019 through 2023, CMS “will assess whether there is a migration of the performance of procedures from the hospital setting to the ASC setting as a result of the use of a productivity-adjusted hospital market basket update, as well as whether there are any unintended consequences, such as less than expected migration of the performance of procedures from the hospital setting to the ASC setting.”

Update to Conversion Factor: CMS is proposing a 2022 conversion factor of $50.043 for ASCs meeting the quality reporting requirements, which is an increase of $1.091 above the 2021 conversion factor of $48.952. This is a 2.3 increase, which reflects a 2.5% increase on the basis of the hospital market basket that was then reduced by a productivity adjustment of 0.2%. For ASCs not meeting the quality reporting requirements, the proposed 2022 conversion factor is $49.064.

The 2022 conversion factor for hospital outpatient departments (HOPDs) meeting the quality reporting requirements is $84.457. As in past years, the parallel ASC conversion factor is about 59% of this HOPD conversion factor. The 2022 conversion factor for HOPDs not meeting the quality reporting requirements is $82.810, and the parallel ASC conversion factor is about 59% of this HOPD conversion factor.

The proposed rule notes that “total payments to ASCs (including beneficiary cost-sharing and estimated changes in enrollment, utilization, and case-mix) for CY 2022 would be approximately 5.16 billion, a decrease of approximately 20 million compared to estimated CY 2021 Medicare payments.”

Complete Reversal Regarding Inpatient-Only (IPO) List: In the proposed rule, CMS states that “we propose to halt the elimination of the IPO list and, after clinical review of the services removed from the IPO list in CY 2021 as part of the first phase of eliminating the IPO list, we propose to add the 298 services removed from the IPO list in CY 2021 back to the IPO list beginning in CY 2022.”

The proposed rule states, “Services included on the IPO list were those determined to require inpatient care, such as those that are highly invasive, result in major blood loss or temporary deficits of organ systems (such as neurological impairment or respiratory insufficiency), or otherwise require intensive or extensive postoperative care”. CMS continued, “Our goal is to ensure that inpatient only designations are consistent with current standards of practice.”

CMS concluded:
After further consideration and review of the additional feedback from stakeholders, we recognize that the timeframe we finalized in the CY 2021 final rule with comment period for eliminating the IPO list did not, and would not, give us a sufficient opportunity to carefully assess whether a procedure should be payable in the HOPD setting, with considerations to beneficiary safety and medical advancements. We also recognize that the unprecedented removal of the 298 codes from the IPO list transpired quickly. Given the significant policy shift and work required to operationalize the elimination of the IPO list, we recognize that more time is required to separately evaluate and consider the inpatient only classification of each service and its potential APC assignment.

The agency also noted that it had conducted an initial review of billing data through May 21, 2021, and found that “fewer than 3 percent of the services removed from the IPO list in 2021 have seen notable volume in the outpatient setting following their removal from the IPO list.”

Substantial Reversal Regarding ASC Covered Procedures List: The proposed rule would remove 258 of the 267 procedures that were added to the ASC CPL in CY 2021. CMS explains, “One issue we identified with our revised policy is that many of the procedures added in CY 2021 would only be appropriate for Medicare beneficiaries who are healthier and have less complex medical conditions than the typical beneficiary. Upon further review, we believe the subset of Medicare beneficiaries who may be suitable candidates to receive these procedures in an ASC setting do not necessarily represent the average Medicare beneficiary.”

The agency continued, “The policy finalized last year allows individual physicians discretion to perform a number of procedures in the ASC setting that would not necessarily be appropriate for the typical Medicare beneficiary in that setting . . . In light of these concerns, in this CY 2022 OPPS/ASC proposed rule, we propose to revise the criteria and process for adding procedures to the ASC CPL by reinstating the ASC CPL policy and regulation text that were in place in CY 2020 . . . [Effective January 1, 2022,] covered surgical procedures are those procedures that [under the 2020 regulations] meet the general standards and do not meet the general exclusions.”

For CY 2022, we propose to change the current notification process for adding surgical procedures to the ASC CPL to a nomination process. We propose that external parties, for example, medical specialty societies or other members of the public, could nominate procedures to be added to the ASC CPL. CMS anticipates that stakeholders, such as specialty societies that specialize in and have a deep understanding of the complexities involved in providing certain procedures, would be able to provide valuable suggestions as to which additional procedures may reasonably and safely be performed in an ASC.

March 1 of a year would be the deadline to submit nominations for procedures to be added to the CPL for the following year.

Regarding ASC covered surgical procedures and ancillary services, CMS noted that it added 12 codes effective April 21, 2021, and that 17 more were added effective July 1, 2021. Approximately 58 new or substantially revised codes are proposed to be added for CY 2022 (according to information on the CMS Internet site but not in the proposed rule). Additional codes will the added in the OPPS-ASCs final rule issued in November or December.

Medicare ASC Budget Neutrality

The decision of CMS to establish a policy of site-neutral payments between off-campus HOPDs and physician practices for E/M visits was an important step in the right direction. (See the discussion in the section on general policy issues.) Given that Medicare reimburses ASCs at a rate that is about 59 percent of the rate for HOPDs, there should now be a focus on requiring site-neutral payments between ASCs and HOPDs for any procedure that is on the ASC Covered Procedures List (CPL).

Achieving this goal, however, may require legislation due to two problems. The first problem (as noted in previous newsletters) is that ASC payments potentially could go down under current law. CMS takes the position that the Medicare ASC payment system must be budget neutral, meaning that the amount of the money in the system must stay the same from year to year except for increases resulting from updates to the ASC conversion factor. Therefore, any increase in payment for one procedure must be offset by a reduction in payment for one or more other procedures. This CMS position (also referred to as the ASC weight scaler) has always been a problem, but the Advocacy Committee expected it to get worse due to the elimination of the inpatient-only (IPO) list, as the available money in the ASC system must be divided among more and more procedures. (See the discussion in the previous newsletter.) The 2022 OPPS/ASCs proposed rule, however, restores the IPO list; therefore, there is time to develop a new approach before many procedures are removed from the list and migrate over time to the ASC CPL.

The second problem is that, as more and more procedures are performed in ASCs, there will be a need to transfer money from the OPPS payment system to the ASC payment system, but it is likely that CMS does not have the statutory authority to do this.

Another issue is that patients treated by ASCs are subject to Medicare cost-sharing requirements, which typically are 20 percent; therefore, it may be appropriate to establish a cost-sharing cap for procedures performed at ASCs.

The Advocacy Committee has begun having discussions with Capitol Hill about the issue that changes must be made in order to maintain a sustainable ASC system. The Advocacy Committee is considering whether to develop legislation to make these changes.

Quality and Cost Data

As noted in previous newsletters, the Advocacy Committee believes that ASCs should expand efforts to collect data demonstrating the quality of procedures performed in ASCs, including aggregating the data. This will help respond to any negative articles by media reporters. It will also be helpful with the Medicare Payment Advisory Commission (MedPAC), many of whose members apparently do not have a favorable attitude toward ASCs. And quality data will help with efforts of the Advocacy Committee directed to Congress.

MedPAC consistently recommends against any updates to the ASC conversion factor because of the lack of cost data. The 2022 OPPS/ASCs proposed rule notes that MedPAC found in its March 2021 report that “based on its analysis of indicators of payment adequacy, the number of ASCs had increased, beneficiaries’ use of ASCs had increased, and ASC access to capital has been adequate. As a result, for CY 2022, MedPAC stated that payments to ASCs are adequate and recommended that in the absence of cost report data no payment update should be given for CY 2022 (that is, the update factor would be zero percent).”

Again, appropriate quality and cost data will help our efforts with Congress, CMS, and MedPAC. For example, we likely will be approaching Congress to ask that it require CMS to use the hospital market basket to update the ASC conversion factor each year.